Introduction • Adversity is a state or instance of serious or continued difficulty or misfortune. (Wikipedia)

Introduction…Contd

Introduction…Contd • Even in good times, there's enough difficulty to go around for everyone. But the last few years' economic problems have made for more adversity than many have seen in a lifetime. • The dilemma is that healthcare is an essential service. This makes surviving with adversity more challenging.

The environment

The environment • The economy and liquidity crunch affecting the country has had dire consequences on both Funders and providers. • Delayed payments by funders mainly as a result of delayed subscriptions payment. • Non- payments by debtors for both funders and providers resulting in bad debts. • Strained cash flows for both funders and providers.

The environment. . . Contd • In 2014 AHFo. Z lost 4 members due to viability challenges. • Low utilisation patterns. • Some people opting to consult faith and traditional healers or simply stay home. • Some facilities in need of upgrading to suit modern standards and need equipment replacement.

Environment. . . Contd • Statistics show that hospitals are currently taking at least 25% of total claims paid. • Hospitals report that they are surviving on very tight budgets despite the “Lion’s share” • Funders looking at the 25% already going to hospitals and are concerned about sustainability given any increases. • Hospital bills are usually paid in full including drugs.

Environment. . . Contd • Fee increases require subscription increases. • Members are struggling with subscriptions at current levels. • Changes that have the effect of increasing costs need to be tested for affordability at prevailing subscription levels. • Movement of non-chargeable items to chargeable list increases costs hence need for careful assessment.

Environment. . . Contd • This applies to some amendments that have the same effect. • Some funders have recently adjusted subscriptions for some packages to catch up with costs under those packages. • Some Funders have gone into service provision to provide an option for their members.

Environment. . . Contd • AHFo. Z does not condone directing of patients to funders’ facilities as this is illegal. • Medical aid fraud is on the increase and is contributing in pushing up costs. • Applications for AHFo. Z payee numbers continue to increase. • This means more players coming to share from a shrinking cake.

Environment. . . Contd • Total AHFo. Z payee numbers from database is 6000 though 2000 are thought to be in the diaspora while 4000 are active in Zimbabwe. • 150 private hospitals have AHFo. Z payee numbers and are active. • In 2014 hospitals’ registrations increased by 9% while GP registrations increased by 18%.

Survival techniques “The capacity to respond quickly and constructively in a crisis—can be hard to master when a manager is paralyzed by fear, anger, confusion, or a tendency to assign blame”.

Survival techniques. . . Contd • Given the harsh economic environment the starting point is to explore areas where costs can be cut. • Elimination of waste can bring amazing results. • Review the supply chain procurement tendencies for goods and services e. g. consumables and staffing?

Survival techniques. . . Contd • In the healthcare sector, costs cannot be passed on to the consumer as health is an essential commodity. • Review operations in line with emerging trends e. g new competitors, new technologies and changing consumer habits which may disrupt established practices.

Cutting Costs • Under the circumstances, cutting costs is one of the most beneficial strategies. • Identify areas of wastage. • Look at staffing and procurement Policies. • Review and monitor usage of drugs and consumables. • The exercise to identify potential areas of cutting costs may require consultants.

Recommendations. . . Contd • Review reimbursement models to global billing for example. • All parties should think long term and jealously guard the dollar being lost through medical tourism. • Need to get the fundamentals right.

Conclusion • With 80% of service providers’ income coming from funders, it is apparent that the 10% insured population cannot sustain the healthcare sector.

Conclusion. . . contd • Uncontrolled costs will result in adverse selection which will inevitably affect providers resulting in a total collapse of the private sector. • The macro economical fundamentals need to be right in order for the sector to thrive. • Under the circumstances, survival lies in the ability to adapt and avoid being extinct like the mammoth.

Conclusion. . . contd • The woolly mammoth was well adapted to the cold environment during the last ice age. It failed to adapt to climatic changes and it became extinct. • Need to embrace the “New Normal” (Dr. Mangundya RBZ) and be innovative.